Executive Decision

NewcrestImage Adds Pair Of Veterans To C-Suite To Propel Growth

With designs on significantly growing its portfolio of properties as well as its overall revenue, NewcrestImage recently bolstered its executive ranks with the addition of two lodging and finance veterans.

Effective July 1, the husband and wife team of David Perel and Caroline Lerner Perel have taken on the positions of Chief Investment Officer and Chief Development Officer, respectively. Both executives will report to Mehul Patel, Chairman and CEO of the Lewisville, TX-based owner/operator.

Patel explained the newest additions to the C-suite, which now consists of 8 executives, and the company’s appetite for growth. “NewcrestImage has been growing over the past 6 years and will continue to elevate our investment criteria and investment grade and continue to do much larger projects. So we needed to build the same level of human capital,” he told Hotel Interactive® in an exclusive interview.

Patel was first introduced to the Perels a couple of years ago when they purchased a hotel from the company while with Civitas Capital Group. He explained that discussions about joining NewcrestImage began taking place sporadically until they heated up recently when “our strategies and our interests aligned so we were able to bring them on board.”

Both executives joined Civitas in 2013 with David serving as managing director and head of lodging investments. During the past 10 years, he has been involved in raising and investing more than $300 million for hotel development and acquisitions. He also spent more than 10 years in investment banking. His primary responsibility in his new position is to raise and invest $250 million in private equity investments with both institutional and non-institutional sources for hotel development.

Meanwhile, Caroline Lerner Perel--who was managing director on the lodging team at Civitas--will be expected to aggressively evaluate and recommend appropriate investment opportunities, specifically through the acquisition of existing properties. With more than 25 years of lodging experience, she led the development of 12 hotels while at Civitas as well as all of its hospitality asset management.

Patel--who noted the new hires will help free him up to focus on mergers and acquisitions--talked about their collective skill sets. “They’re great at financial engineering and they know how to put together capital stacks,” he said, adding that expertise ranges from unique incentives to EB-5 financing. Patel further pointed that when those skills are paired with the company’s historic tax credit expertise, for example, its combined capital stack experience is now “very unique.”

The company is focused on national expansion going forward, according to Patel. NewcrestImage currently has some 28 properties in Texas, Oklahoma and Louisiana as well as 15 projects in the pipeline, including locations in Arizona, Ohio and Oregon.

While he emphasized that any expansion would first and foremost be “opportunistic,” Patel did acknowledge that the east coast, specifically Boston, as well as California, were among the targeted locations for the company to build its portfolio of primarily branded lifestyle hotels.

Patel noted the company will have a four-pronged approach to expansion with a focus on campus-style projects with multiple hotels; the conversion of historic properties or office buildings; ground-up construction; and acquisitions. In terms of overall growth objectives, Patel maintained the company would like to acquire approximately 20 assets and then follow that up with roughly 6 to 8 ground-up projects a year ranging from $50 million to $75 million. He further noted the company currently generates some $250 million in annual revenue and would like to triple that within three years.

Patel dismissed any concern about the maturing lodging cycle as it relates to the company’s expansion strategy. “You’re going to have peaks and valleys on a project. We’re really focused on location, which is the key, as well as the brand and the market we’re going in. If those three attributes are properly positioned then it doesn’t matter to us what cycle we’re in,” he said.

NewcrestImage--which was formed in 2013 through the merger of the principals’ prior companies, Newcrest Management and Image Hospitality—has carved its niche within hospitality by focusing on new upscale lifestyle brands, such as AC Hotels by Marriott, Canopy by Hilton and Hyatt Centric. In fact, NewcrestImage--which completed the opening of the first AC Hotels property in the U.S. in New Orleans--is the largest operator of the brand in the U.S.

Dovetailing with that, Patel also pointed out the two executives have worked on many projects involving a variety of lifestyle brands such as Aloft, Element, AC Hotels by Marriott and W Hotels, to name a few. “They have done a lot of projects. Caroline worked with Ian Schrager and so she has in-depth experience in high-end boutique projects. So that experience comes to NewcrestImage and that’s in their wheelhouse,” he said.

Patel further touted the benefits of the company’s atypical focus. “We’re focused on growing that new evolution of brand...Our consumer is thinking outside the box. That Courtyard [by Marriott] is a great brand but today people are looking for the new AC Hotel [by Marriott] because they want to change their experience. So I think what we are building is something unique that investors are attracted to,” he said.

And when it comes to the availability of private equity and the potential opportunity for investors, Patel remains decidedly bullish going forward. “There is lot of capital available, we just needed the right team. We feel like we’re in a very unique position to capture the investors who are looking to partner with a group like us who is going to grow the platform in the lifestyle space,” he said.